Transcript Slide 1

Florida’s Risk Management Program
Initiatives to Address Program Cost Drivers
Presentation to the House Subcommittee on General Government Appropriations
February 8, 2011
“Keeping your money in your pocket, where it belongs.”
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Risk Management Program Overview

Florida self-insurance program for property and casualty risks.
Administered by the Department of Financial Services.

Designed to administer certain claims of state agencies and
provide them with loss prevention guidance.

Covers executive, legislative, judicial branches of Florida
government & state universities.

Funded by yearly assessments to participating
state agencies.
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Workers’ Compensation
Program Overview
• Serves as a comprehensive resource to all system
stakeholders.
• Creates a real-time workers’ compensation information
environment and measures the health of the workers’
compensation system.
• Promotes and advocates for accident prevention in the
workplace.
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Claims Data for last three Fiscal Years
PROGRAM
FY 07/08
New
Claims
Reported
FY 08/09
FY 09/10
FY 10/11
(Thru Dec. 2010)
Loss
Payments
New
Loss
Claims
Payments
Reported
New
Claims
Reported
Loss
Payments
New
Claims
Reported
Loss
Payments
13,644
Workers’
Compensation
$103,452,439
13,842
$109,646,128
14,900
$118,915,603
7,254
$51,802,174.37
State Property 54
$138,947
146
$344,639
40
$514,852
42
$57,522.47
Liability
$44,244,615
2,332
$32,653,697
2,242
$26,617,045
1,271
$6,755,211.06
2,462
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Specific Claims Cost Drivers
1. Rising medical costs, including pharmacy. Increase in medical costs of $12.2M
in FY 09/10, but decrease in indemnity (lost salary) payments of $2.5M.
2. Substantially lower recoveries on claims. Decrease from $19.2M in FY 07/08
to $4.4M in FY 09/10.
3. Current law – Presumption Claims (112.18 F.S). Increased cost of $8.4M for FY
09/10 – Over $30M in additional cost since law implementation in 20022003 that expanded ability to file presumption claims to correctional
officers.
4. Mandated “Cost of Living” supplement on PTD claims – 3% to 5% per year.
5. Occasional and unexpected large awards on civil rights violation claims.
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Initiatives to Address Cost Drivers
• Best approach is to prevent all claims from occurring, and to return injured workers to
work as soon as possible.
- Loss prevention staff working with agencies to evaluate high loss areas and develop
prevention strategies, including reducing presumption claims.
- Certain agencies such as DOH and FDLE have already seen large reductions in
workers’ compensation costs.
• More proactive medical care to get injured employees back to work faster, reducing “lost
time” claims. These claims account for 80% of all costs but only 10% of claims.
• Reviewing employment discrimination and civil rights claims to identify opportunities
for early settlement.
• Premium calculation methodology changed to highlight state agencies that proactively
reduce claims.
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2010 Legislative Proposal to Enhance Loss
Prevention (HB 5603)
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The bill, which was vetoed by Gov. Crist:
1.
Required agencies to develop workers’ compensation “Return-to-work”
programs.
2.
Gave DRM authority to audit and monitor agency risk management
systems and loss prevention programs, including requiring agencies to
submit corrective action plans.
3.
Based agency risk management premiums on retrospective as well as
agency-specific outcome measures, to incentivize reduction in claims
costs.
4. Required agencies to return unused funds to the Workers’ Comp Trust
Fund
5.
Revised reimbursement amount for repackaged drugs
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Effects of HB 5603 (2010)
•
The bill would have saved the Division of Risk Management an additional
$500,000 on top of current yearly savings trend of $2.5M for “lost salary”
costs by:
•
•
•
•
Requiring Return-to-Work programs
Creating more loss prevention programs
Provided for savings in drug repackaging reimbursement amounts
Drug repackaging revision would have resulted in additional cost savings:
•
•
•
•
Current law allows prescription drugs to be reimbursed at the “average
wholesale price” (AWP) plus a $4.18 dispensing fee. There is no uniform
definition of “average wholesale price”.
Although drug repackagers do not alter the drugs, they do sell them in different
quantities. In doing so, a new average wholesale price is assigned.
The bill would have continued to allow the repackaging of prescription drugs,
but it strictly limited the reimbursement amount to the AWP of the original
manufacturer, plus the $4.18 dispensing fee.
NCCI estimated that this provision would have reduced total workers’
compensation costs to Florida employers by 1.1%, or $34 million annually.
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Recent Risk Management
Accomplishments/Projects
-
Our team currently makes a concerted effort to create voluntary loss
prevention programming and standards in an effort to reduce costs.
We have a two-level focus:
+ Drive statewide loss prevention program development by providing standards,
guidelines, and policy.
+ Devote staff to working special projects where we see high claims cost and frequency
and a good ROI.
-
We have…
- developed and issued Loss Prevention Standards for all agencies and
universities.
- developed model Return-to-Work Guidelines.
- provided staff Consultation Services, or the process of doing so, for
16 agencies
- engaged Contractor Consultation Services for 7 agency projects
- confirmed onsite agency training for two agencies
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THANK YOU
Questions?
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